NCPA - National Center for Policy Analysis

LONG TERM OR SHORT TERM, PUBLIC HEALTH INSURANCE COSTS ARE GROWING FASTER THAN OUR ABILITY TO PAY

January 18, 2007

The Canadian government's spending on health care has grown faster than its ability to pay, says a new report from the Fraser Institute.

"Since virtually day one, public health insurance costs have grown at an unsustainable pace," said Brett Skinner, the author of the study.  "Whether you look at health care spending trends over the past five years or over the past 31 years, the conclusion is the same -- our current public health care system is not financially sustainable."

  • Evidence from longer trends shows that health expenditures have grown at a faster average annual rate than gross domestic product (GDP) for the entire 31-year period.
  • Government health spending has grown in absolute terms, even when adjusted for Canada's population growth or inflation.

Skinner says solutions can be found in the type of policies used in other countries to deal with similar financial sustainability problems in their public health insurance programs. These policies include:

  • Requiring patients to make co-payments for publicly insured health services.
  • Acknowledging the individual right of patients to pay privately (via private insurance or out of pocket) for all types of medical services, including hospitals and physician services.
  • Allowing providers to charge extra fees directly to patients above the public health insurance reimbursement level and to receive reimbursement for their services from any insurer, whether public or private, without practice restrictions.
  • Permitting private sector (both for-profit and non-profit) health providers to compete with the government sector for the delivery of publicly insured health care.

Source: Brett J. Skinner, "Long-term or Short-term, Public Health Insurance is Not Sustainable: A Reply to CUPE About Health Spending Trends in Canada," Fraser Institute, January 11, 2007.

 

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